Philippines Liquefied Natural Gas Market
The Philippines’ transition to liquefied natural gas (LNG) presents a timely and significant opportunity for U.S. LNG exporters, equipment and services for LNG import terminals, storage facilities, and regasification plants. This transition comes at a critical time, as the country faces mounting energy demand, rapid economic growth, and the looming depletion of its domestic Malampaya gas field.
Currently, natural gas accounts for 22% of the Philippines’ power generation mix—a share that continues to grow. With domestic production in decline, the country now sources 46% of its natural gas from imported LNG. As a reliable transition fuel, natural gas helps maintain baseload capacity, stabilize the grid, and support renewable energy integration. LNG demand is estimated to rise from 1.7GW in 2023 to 11.3GW by 2040. The Philippine power sector is driven by private companies, which are now strategically shifting toward imported liquefied natural gas (LNG), leading the development of critical infrastructure such as import terminals, storage facilities, and regasification plants.
In January 2025, the Philippines approved the Philippine Natural Gas Industry Development Act (Republic Act No. 12120), which established a comprehensive framework for the use of natural gas. The law includes fiscal incentives and value-added tax exemptions to attract investment. While the implementing rules and regulations do not prohibit the importation of LNG, private generation companies are required to procure an unspecified share of their supply from natural gas. To offset declining indigenous production, Philippine energy firms have accelerated LNG infrastructure expansion. The Philippine Department of Energy (DOE) also plans to implement an aggregation process that combines indigenous and imported gas purchases to lower costs and ensure supply stability.
The Philippines is currently importing LNG on a spot basis through two terminals with total capacities of around 8.26 million tons per annum (MTPA) in Southern Philippines. Four additional LNG receiving terminals and gas-fired power plants are being constructed, collectively adding another 10.72 MTPA of regasification capacity. But these projects are already facing delays due to grid connection limitations and ongoing permitting challenges.
U.S. LNG suppliers are encouraged to start discussions in securing long-term supply contracts. Philippine buyers currently rely on spot market purchases through 2025, with plans to transition to index-based pricing under long-term contracts in the third year.
To learn more about the Philippine market for liquefied natural gas and how your company can take advantage of these opportunities, contact U.S. Commercial Service Energy Specialist, Thess Sula at Thess.Sula@trade.gov.